Intellect Design Arena has received a favorable order from the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai. The CESTAT has set aside a Service Tax demand of ₹36.77 crore, along with applicable interest and penalties. A separate demand of ₹1.16 crore was remanded for verification. This outcome significantly reduces the company’s contingent liabilities.
Favorable Ruling on Service Tax Demand
Intellect Design Arena announced that the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, has issued a favorable final order dated December 15, 2025. The order pertains to a previously contested Service Tax demand.
Details of the CESTAT Order
The CESTAT ruling has set aside the demand for Service Tax amounting to ₹36,77,40,000, which includes interest and penalties. This demand was previously confirmed by the Principal Commissioner of CGST and Central Excise, Chennai North.
Impact of the Order
The Tribunal has set aside the demand of ₹36,77,40,000 related to overseas transactions.
Additionally, a separate demand of ₹1,16,11,766 has been remanded due to a clerical error. If the payment is verified, this demand is expected to be resolved.
Positive Outcome for Intellect Design Arena
This ruling significantly reduces the company’s contingent liabilities and confirms the validity of its tax positions. The favorable decision positively impacts the company’s overall financial health. The Service Tax demand of ₹36,77,40,000/-, along with associated penalty and interest, has been quashed removing significant contingent liability from the Company’s books.
Regarding the remanded matter of ₹ 1,16,11,766/-, it has been remanded solely for verification of payment proof. The Company has already discharged this liability and expects no further financial outflow on this account. The Company will work with the Adjudicating Authority and produce reconciliation to drop the demand.
Source: BSE
